The Japanese yen strengthened against the US dollar after the ruling Liberal Democratic Party (LDP) secured an absolute majority in Sunday's lower house election, moving the currency pair away from levels the market perceived could trigger official intervention. The yen rose as much as 0.6% to 156.22 per dollar, after having fallen 0.3% earlier to touch 157.76. According to public broadcaster NHK, the LDP alone won a two-thirds absolute majority in the 465-seat lower house. This electoral achievement makes the LDP the single party with the highest proportion of seats in a post-war Japanese lower house election. Motoshige Sakai, head of foreign exchange and financial products trading at Mitsubishi UFJ Trust and Banking Corporation, stated, "The scale of the LDP's victory exceeded market expectations, leading to yen weakness in morning trading, but profit-taking is now prompting a slight rebound. Market caution regarding potential intervention by Japanese authorities remains, which could limit the upside for the dollar-yen pair." Since Sanae Takaichi announced the snap election last month and introduced a temporary food tax cut plan, concerns over excessive Japanese fiscal spending have intensified, putting pressure on the yen and Japanese government bonds. Most investors believe Takaichi's victory will enable her to further increase Japan's already substantial debt burden. Following the Prime Minister's decisive election win, who strongly advocates for economic stimulus, Japan's top currency official, Atsushi Mimura, stated that authorities are watching market movements with a high sense of urgency. Finance Minister Satsuki Katayama said that if necessary, communication with the market would take place on Monday. Traders are closely watching the key level of 159.45 yen per dollar, which was the low touched by the yen in mid-January and represents the yen's weakest level in 2024. When the yen approached this zone last month, there was widespread speculation that Japanese authorities might intervene to support the currency. Japanese officials have previously indicated that they are more focused on the pace of currency movements and the volatility of exchange rates, rather than specific levels. In a note to clients, Chidu Narayanan, Chief Asia-Pacific Strategist at Wells Fargo, said, "As the dollar-yen pair approaches the 159 level, vigilance is warranted for an escalation in Japanese verbal intervention. We believe risks remain for further dollar-yen upside in the near term, with the actual level for physical intervention likely closer to 162." On January 23, the yen surged sharply following reports that the New York Federal Reserve was conducting a rate check. Subsequently, the yen weakened again after a US official stated that the US would "absolutely not" intervene in the currency market. Furthermore, comments from Sanae Takaichi that a weaker yen presents significant opportunities for export industries have added to the recent downward pressure on the currency.